The Manitoba Court of Queen’s Bench recently held that the Canadian Revenue Agency (CRA) has priority over subcontractors and the bonding company in respect of holdback funds held by the owner in trust for the contractor. The decision in Manitoba Housing and Renewal Corp. v. Able Eavestroughing Ltd., once again underlines the impact of federal […]

The Alberta Court of Queen’s Bench recently considered an interesting issue relating to labour and material payment bonds. When a contractor requires a subcontractor to obtain such a bond, does the contractor have a duty to tell the subcontractors about the existence of the bond so that they can make a timely claim under it, […]

Payment bonds come in various shapes and sizes and it is important to read them carefully before concluding what they bond. They may not just bond the payment obligation of the party obtaining the bond. They may also bond the payment obligations of all persons on the project. If they do the latter, then the […]

Bonds and other forms of guarantees and indemnities are commonly used on construction projects. If a contractor applies for a performance bond, the bonding company will require the contractor to indemnify the bonding company. The bonding company may also require the principal shareholder of the contractor to guarantee the contractor’s obligation and to directly indemnify […]

The recent decision of the Australia High Court in Andrews v. Australia and New Zealand Banking Group Ltd. is important for the building industry. While it dealt with a banking contract, the principles it applied are directly relevant to building contracts. The central decision in Andrews v. ANZ is that the doctrine prohibiting contractual penalties […]

Incorporation by reference in building contracts By Thomas G. Heintzman and Julie Parla1 A common clause in a building contract is one which incorporates the terms of another contract or document into the building contract in issue. The effect of such a clause is referred to as “Incorporation by Reference”. These clauses are common in […]

Every once in a while, an important decision comes along which should be put in your hip pocket so that it can be pulled out when needed. Rainy Sky S.A. v. Kookmin Bank is such a decision. In this decision, the U.K. Supreme Court (formerly the House of Lords) recently held that if there is […]

Building Contracts – Tenders – Bonds Today we will examine a recent decision of the Court of Appeal of Ontario which dealt with Tenders for construction contracts. In Bois A. Lachance Lumber Limited v. Conseil Scolaire Catholique de District des Grandes Rivieres, the tender documents required the bidders to obtain performance bonds “upon acceptance” of […]